Auto Insurance for Electric Vehicles: What You Should Know

While EVs offer numerous benefits, such as lower fuel costs, they also come with unique considerations that can affect auto insurance premiums and coverage needs.

How EV Ownership Impacts Auto Insurance Costs

One of the primary factors influencing insurance costs for EVs is the vehicle’s higher purchase price compared to traditional gasoline-powered cars. EVs often have advanced technology and specialized parts, making repairs more expensive. This, in turn, can lead to higher comprehensive and collision coverage premiums.

Additionally, the cost of replacing an EV battery, which can be significant, is another factor that insurers consider. The battery is one of the most expensive components of an EV, and its replacement can drive up the cost of claims.

Another aspect to consider is the availability of qualified repair shops. Not all mechanics are trained to handle EVs, which can limit options and potentially increase repair costs.

Essential Policy Features for EV Owners

Minnesota requires all drivers to maintain minimum amounts of auto liability coverage, which can help cover third-party accident-related injuries and property damage.

If you lease or finance your vehicle, the lienholder can require full coverage auto insurance, including comprehensive and collision coverage. These policies may help cover the cost of repairing or replacing your EV after a covered incident or accident.

Since the battery is a significant part of an EV’s value, ask your agent about coverage for battery damage or replacement. Some insurers offer specific endorsements for battery coverage.

If you financed your EV, your lender may also require gap insurance, which can cover the difference between the vehicle’s actual cash value and the remaining loan balance if your car is totaled. This is particularly important for EVs, which can depreciate quickly.

Contact Us

Contact Dean Olson Insurance Agency in Shoreview, MN, for a personalized auto insurance quote.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.